Social Security: Lifetime earnings used to figure benefits

Social Security: Lifetime earnings used to figure benefits

August 16th, 2012 by Gregory Holmes in Business Diary

Gregory Holmes, district manager for Social Security

Gregory Holmes, district manager for Social Security

Q Mr. L asks: "I'm now 66 and am still working full time. If I start drawing Social Security in January, will my wages next year be used to increase the amount of Social Security for future years or will the amount [with COLA] remain the same regardless of what I earn?"

A Social Security benefits are based on your lifetime earnings. Your actual earnings are adjusted or "indexed" to account for changes in average wages since the year the earnings were received.

Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit or "primary insurance amount." This is how much you would receive at your full retirement age -- 65 or older, depending on your date of birth.

If your earnings for 2013 or later are higher than any earnings used to calculate your benefit, your benefit will increase.

For more information, you may log on to our website at and use our Retirement Estimator or Online Calculator to get an estimate of your benefits.

Q Can I receive Social Security benefits and Supplemental Security Income benefits at the same time?

A You may be able to receive SSI in addition to monthly Social Security benefits if your Social Security benefit is low enough for you to qualify for SSI. Whether you can get SSI depends on your income and resources (the things you own).

If you have low income and few resources, you may be able to supplement your Social Security benefit with an SSI payment. You can find out more about SSI by going to and selecting the "SSI" banner at the top of the page.

Q Who can get Extra Help with Medicare prescription drug coverage?

A Anyone who has Medicare can get Medicare Part D prescription drug coverage. Joining a Medicare prescription drug plan is voluntary, and you pay an additional monthly premium for the coverage. People with higher incomes might pay a higher premium.

If you have limited income and resources, you may be eligible for Extra Help to pay for the costs -- monthly premiums, annual deductibles, and prescription copayments -- related to a Medicare prescription drug plan.

To qualify for Extra Help, you must live in one of the 50 states or the District of Columbia. Your resources must be limited to $13,070 for an individual or $26,120 for a married couple living together. (Resources include such things as bank accounts, stocks and bonds. We do not count your house and car as resources.)

Your annual income must be limited to $16,755 for an individual or $22,695 for a married couple living together.

Even if your annual income is higher, you still may be able to get some help. Learn more at

Submit questions to local Social Security Director Gregory Holmes by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by emailing him at